A valuable primer on long-term disability insurance benefits

On Behalf of | Jan 12, 2021 | Long-Term Disability Insurance

For physically challenged workers unable to perform their jobs for extended periods, long-term disability insurance is a solid option that just may prevent them from financial disaster. Long-term disability insurance benefits usually pay workers 40% to 60% of their pre-tax earnings.

To help you better understand the predicament that some workers face in these situations, consider that more than 60% of all personal bankruptcies stem from medical-related difficulties. When pursuing long-term disability benefits, you likely have a great amount to learn. Let us find out more.

A claim can last up to three years

Here are some of the basics to know and understand about long-term disability insurance:

  • An estimated 90% of disabilities stem from illness. This list includes many illnesses such as cancer, asthma, arthritis, back pain, lupus, heart-related ailments, brain injury, anxiety and depression.
  • Find out whether your employer provides long-term disability insurance. The U.S. Bureau of Labor Statistics disclosed that in 2018, an estimated 34% of workers in the private industry had access to long-term disability plans. Meanwhile, 38% of state and local government workers had access to such benefits.
  • It is important to obtain supplemental coverage from a private insurer if the long-term disability amount offered through your workplace is insufficient. However, please understand that this insurance is expensive to purchase by an individual.
  • Long-term disability payments that originate from the employer’s insurance policy are considered taxable income. However, if an employee purchases the policy on his or her own, the payments are not taxable.
  • The average period of a long-term disability claim is nearly 35 months. This translates, essentially, to a disabled worker who does not have access to such insurance would have no income for close to three years.

Long-term disability benefits represent a crucial safety net for workers. Such payments help you get through challenging times.